Jack Dunn - Reclaiming Common Sense

The real October surprise this past month was that the economic data was weak and that was considered good because it was not bad data.The September Jobs data was skewed by a historic seasonal factor. Men were found to be working fewer full-time jobs than prior to the recession. New home construction and new home sales were found to be trending with sales levels we last saw during 1983 and 1992. The federal debt soared to $19.7 trillion. And there were some Presidential Debates.


(Oct 1) The month started as almost every month starts on this website with the "Top Ten Column." The Top Ten Column of September included columns on the August Jobs Report, column, on the misleading Weekly Unemployment Claims reports, Workforce Participation, Retail Sales, and the Top Ten Columns of August.


(Oct 3) The Week started with the September Jobs Report Forecast Column. "September Should Be A Job Loss Month" was subtitled "Seasonal Factors Matter." It was thought that we should see a drop in full-time jobs, an increase in part-time jobs, a drop in unemployed workers, a drop in the unemployment rate and a drop in the participation rate, all non-seasonally adjusted. It was thought that the authors of the report would manipulate the seasonal factors that are used to convert the non-seasonally adjusted Current Employment Statistics (CES) data to the reported Seasonally Adjusted CES data. The only question was how high would the seasonal factor be?

(Oct 4)  Last week this column got a little busy and ignored the weekly unemployment claims report. This should not be a surprise as "everyone else" has forgotten about it. "Unemployment Claims Limbo - How Low Can They Go?" detailed how the NSA First-time Unemployment (FTU) claims level was at a 16 year low and the Continuing Claims data was near a 16 year low for the final week of September.  This is not a good thing. Read the column and prior columns to understand how these reports are understating the weakness in the economy.

(Oct 5)  Seasonal Factors are the lifeblood of government economists. Seasonal factors can turn job losses into job gains. They can inflate or deflate unemployment claims numbers. They can make or break streaks ."September Seasonal Factor Creep" details how the September data is being more and more manipulated every year. This column will explain why I rarely trust any seasonally adjusted data.

(Oct 6) There are times when this column attempts to connect the dots between various reports. It is easy to connect the dots between Retail Sales and Inflation. It is easy to connect the dots between Tax Revenue and Retail Sales. It became obvious that I needed to produce a column on the CPI (Consumer Price Index) data that was released last month as people were discussing rising medical care costs and rising health insurance premiums.  This data is seasonally adjusted in so many ways that multiple comparisons have to be made. Suffice it to say that "gasoline savings" we are seeing cannot be "saved" if shelter and medical costs are rising.  "August Shelter Costs Offset Energy Savings" details how medical costs and medical insurance costs are exceeding the base rate of inflation.

(Oct 6) If no news is good news then the Weekly Jobs Report must be "great" news. "No News Unemployment Claims News" details how the First-time Unemployment Claims streak is invalid and how the SA FTU number could have been reported significantly higher if it was reported at all.

(Oct 7) This Jobs Report underwhelmed. September is a jobs loss month. This September was worse than is being reported elsewhere. We lost over 1 mill full-time jobs. We gained over 1 million part-time jobs. The number of unemployed fell. The participation rate fell. If seasonal factors from September 2012 were used we would have reported only 33,000 Private Sector Workers joining the workforce, even though we really lost 457,000 NSA Private Sector Workers.  "September Jobs Report  - Down is Up" details how we are adding fewer private sector workers this year than we added during 2011, 2012, 2013, 2014, or 2015.


(Oct 8) "Skewed Data - October 8th Week in Review


(Oct 9) "Can we Seasonally Adjusted Our Income, Please" was written on Sunday. This is rare. Normally the only column written on a Sunday is one that is inspired while I am attending church. This column used the seasonally adjusted (SA) and non-seasonally adjusted (NSA) Current Employment Statistics (CES) as a backdrop. The column detailed how we lost NSA CES workers last month and the seasonal adjustments turned that loss into a gain. We normally see seasonal job loss in the September jobs report. That is why the government uses seasonal factors to adjust the data. The problem is that they had to 'invent' a new seasonal factor to make the number sound better than it was. If we would have used the seasonal factor from September of 2012, the previous Presidential Election, the "job gains" would have been reported at 33,000 Jobs.

(Oct 10) A meme that this column tackled many months ago was the one that said President Obama has added more jobs than any other President, other than President Bill Clinton.  "The Era of the Meme: Which President Created More Jobs" was written August 21, 2015.The author of the meme was comparing President George HW Bush (41,) President Clinton, President George W Bush (43,) and President Obama for job creation. They were comparing a one term President and two two-term Presidents at the end of their careers with someone who still had 18 months left in his term. It wasn't fair or balanced. We needed to compare the Presidents at the same point in time during their Presidencies. This was the genesis of the "Four Presidents at __ Months" series. This month we are at "Four Presidents at 92." If we had the same participation rate as we did under Reagan, Clinton, or Bush 43 we would have 7.7 million to 9.8 million more participants. If they are not participating they must be unemployed. If they are unemployed then the effective unemployment rate is between  9.66% and 11.77%.

(Oct 11) Not all jobs are created equally. We saw jobs drop in eight sectors last month. The September Slump is a regular occurrence, as previously noted. What is unusual is that there are six sectors will fewer jobs than prior to the recession. "September Eight Sector Worker Slump" details how the mining and logging, manufacturing, construction, Information Technology, financial Services, and Government sectors have fewer jobs than they had during July 2007 - Nine years ago

(Oct 12) A meme that this column addressed the "War on Women."  Written December 11, 2014, the column "War on Women? Men Lost 740,000 Jobs during November"  examined the changes in population, full-time jobs, part-time jobs and unemployment by gender. This week the column "Fewer Men Working Full-time  than July 2007" revisited that analysis and found that women had added full-time and part-time jobs while men have lost full-time jobs and added part-time jobs since July 2007.

(Oct 13) There are many untold stories with regard to the monthly jobs report. The war on men, the employment sector slumps, and the growth of the multiple jobholder. There has been a uptick in the number of people working multiple jobs. Millions of people are working two part-time jobs. Hundreds of thousands of people are working two full-time jobs. Millions are working a part-time job and a full-time job. We set a record for the number of people working two part-time jobs for the month of September. Why is this so important? If people are losing one job and have another hey do not qualify for unemployment benefits, even if the job they lost was a full-time job. The article "Two Job Economy" goes into more detail.

(Oct 14) One of the other pieces of economic data that this column normally covers during the course of a month is the Monthly and Annual Retail Trade Summary (MARTS) report.   Retail sales are the lifeblood of an economy. Not everybody buys a house during the year. Everyone needs food, clothing, and other retail items. We normally see the NSA Retail data slide during September. This happened this year. The good news is that other than Home Furnishings and Gasoline, retail sales in the remaining sectors were all higher than prior to the recession. The problem is that the Appliance and Electronics Sector and the Home Furnishing sectors will not likely get back to those levels this year.  Furniture Sales are on track for 2005 levels. Electronics and Appliances are on track for the 2012 level which was slightly better than 2005.  "September Retail Slides, Revisions Up and Down" digs into the data. While others are saying sales crept up last month, seasonally adjusted, we know otherwise.


(Oct 15) The Week in Review.


(Oct. 17)  The week started with a continuation of the analysis of the September Jobs Report. Remember that we lost 1.1 million non-seasonally adjusted(NSA)  Full-time jobs and gained 1.3 million NSA Part-time jobs. Remember that the authors of the employment situation report had to invent a new seasonal factor to convert weak  (NSA) Current Employment Statistics into acceptable SA CES data. Remember that we saw record levels of people working two part-time jobs. The article "MIA: Workers 35-54 Year Old" details how the workforce population and  jobs worked for  35-49 years old have dropped and the number of jobs worked for 50-54 year olds have also dropped. Is it because they are having families or because they never regained work after the Great Recession?

(Oct. 19)  This column spends a considerable amount of time, energy, and effort covering the jobs report data and the housing data. The housing data has three main reports: New Home Construction data, New Home Sales Data, and the Existing Home Sales Data. We received reports on the New Home Construction data and the Existing Home Sales Data this week. The article "Weak, Weakening September New Construction" details how we have had an incomplete recovery in the new construction market. We are seeing Starts and completions data comparable to 1983, 1992, and 2007. We were on the decline during 2007. We were seeing improvement during 1983 and 1992. We will not going to hit any of those levels.

(Oct. 20)  Contrary to what you might hear, or not hear, there are still unemployed workers who make first-time unemployment (FTU) claims and who are receiving continuing unemployment claims (CC.) "Unemployment Claims Still Rolling" details how while we are seeing 16 year lows for October FTU and CC claimants, we have not seen over 80 consecutive weeks of under 300,000 seasonally adjusted FTU claimants and how the low level of claimants may be contributed to record levels of people working two part-time jobs and a generational low for workforce participation. People are still starting the unemployment process.

(Oct. 20)  We have seen a dramatic drop in the home ownership rate over the past decade. Home ownership provides people with shelter, security, and a tax write-off. People who purchase homes need lenders, appraisers, movers, retail sales people, some Realtors, and other workers. Existing home sales are a catalyst for our economy. Unfortunately this data set does not go back to 1983 or 1992., as does the new home construction data. This data set reveals that we are on a slower pace of sales than we were during 2003, that the growth rate is slower, so the recovery will take longer, and that we may be cresting.  "September Existing Homes Still in Recovery" spells out how while we are doing better than we were during the recession we are nowhere near expansion.

(Oct. 21)  If the recovery is so good why don't we have a good feeling about the economy. The media has been touting the economic stimulus of low gasoline prices. Recently Federal Reserve Chairperson Janet Yellen stated that we might need a "hot" economy may be needed to heal the economy. One of the important data sets that is released during a month is the Consumer Price Index data. The CPI data for September shows that we are seeing our energy savings consumed by higher medical costs, higher insurance costs, higher education and communication costs, and higher shelter costs. "Medical Inflation, Shelter Inflation Eating Into Energy Savings "details how we are spending our money and the real inflation that we are experiencing.


(Oct 22) Week in Review


(Oct 24) This week one of the headline stories was the Obamacare influenced spikes in health care expenses across the nation, as the new premium and deductible information was released. Last week we received the Consumer Price Index report which revealed that health insurance was up over 8% from September to September. This past Summer the Kaiser Family Foundation released its Annual  Employers Health Benefit Survey. This week the column "Obama(S)care: Rising Premiums, Deductibles, Responsibility" dove into the Kaiser report and found that Employees are paying a larger share of the cost of employer subsidized health care and that companies with fewer than 50 employees are reducing their health care offerings.

(Oct 25)
The monthly Treasury Statement was released last week with little fanfare. This week this column published an article "Decimated Defense Spending, $19.7 Trillion Debt. " The spending on Health and Human Services, the implementers of the Affordable Care Act, has surged  from $891 billion to $1.1 trillion between FY2011 and FY 2016. The defense budget has been decimated, reduced by over 10%, from $678 billion to $565 billion. And the debt has continued to increase from the $10 trillion President Obama inherited to $19.7 trillion. Unpatriotic. Irresponsible.

(Oct 26)
The housing data has been "better than a sharp stick in the eye." We had a Housing Recession that began during 2005 when units started dropping as sales prices continued rising through the Summer of 2006. Then the recession picked up pace as sales prices and units sold fell through 2010. We have been in recovery mode ever since. We have had weak new home construction data and new home sales data by historic measures (the past 40 years.)The column "September New Home Sales Slower than 1983, 1992" places a historic perspective in the current data.


(Oct 27)
What is up with the weekly Unemployment Claims report? The data is misleading, is "what is up." We do not have a streak of 86 weeks of under 300,000 seasonally adjusted first-time claims. First-time Claims  recorded a gain, non-seasonally adjusted (NSA,) and were reported (SA) as declining. The NSA Continuing Claims number recorded a decrease and reported an increase in claims. "Unemployment Claim Down is Up, Up is Down" goes into detail on the report.


(Oct 29) Week in Review


(Oct 31)  This column has a tradition of writing Jobs Report Forecast columns the week prior to the Jobs Report being released. The reason for this is to manage expectations and to hold the authors of the Employment Situation Report/Jobs Report accountable for what they are reporting.  The column"October (Surprise)  Jobs Report Forecast" examined the data since 1993 and projected that we could have some surprising data. The Current Population Survey that is used to report the unemployment rate and participation rate could show no change or big changes. Full-time jobs could drop. Participation could drop. It also examined the Current Employment Statistics Data that is used for the official "jobs number." It was projected that we should see fewer than 150,000 workers added to the economy and t we could see a seasonally adjusted worker loss.


We have had weak data during May, June, July, August and  and September. The economy is stalling. Will the data be skewed this Friday to show that everything is fine? Will we see the "Fasten Seatbelts Sign" and receive the advice to return our trays to the upright and locked position" due to heavy turbulence?